The CEO explained that, historically, Bitcoin’s block reward halvings have had a positive impact on the coin’s price. While he admitted that historic events do not necessarily predict future events, he noted that miners will have to spend almost two times as much to mine a single coin.
Changpeng Zhao, the founder and CEO of major crypto exchange Binance, suggested that Bitcoin’s (BTC) price has not yet adapted to the upcoming block reward halving.
Zhao suggested that Bitcoin’s price will see more upwards movement in the future during an interview on Feb. 20.
Zhao noted that an asset’s price is determined by demand, not the cost of production, but expects that miners will not be willing to sell below the price of production.
Demand is increasing while supply is decreasing
Furthermore, Zhao said that another consequence of a lower Bitcoin block reward is less inflation, which should also help the price rise. He noted that the effects of lower coin production will be augmented by an increasing number of users in the space, stating:
“The demand side is increasing, the supply side is decreasing.”
However, Zhao also explained that he expects there to be a resistance that will keep Bitcoin’s price around $10,000 for some time, saying, “There are psychological barriers around nice round numbers. So 10,000 is a very nice round number, so … the price will fluctuate back and forth around that a bit.”
Investors increasingly bullish on Bitcoin
While Bitcoin’s price just dropped below $10,000 again, the outlook for Bitcoin is mostly positive according to many experts.
Recently, Cointelegraph market analyst Keith Wareing reported that this week saw Bitcoin’s ascending 50-day moving average cross over its 200-day moving average. This rare bullish sign is known as a “golden cross”, and he suggests that Bitcoin can hit $26,000 in just two months thanks to a bullish event that previously triggered 170% price gains.
Bitcoin News Summary – February 24, 2020
Decentralized loan service, bZx, was hacked second time following a previous incident on Valentine’s Day, for a combined total of 3,581 ETH (currently worth nearly a million Dollars). The hacker took out loans then manipulated the price of the underlying cryptos in order to pay back less than they borrowed.
Chinese crypto exchange, FCoin, published a statement in which they announced the shutdown of their exchange. They admitted to a lack of funds worth up to $130 million. FCoin blamed the loss on a combination of data and decision errors. Analysis suggests the exchange’s issues go back to its founding in July of 2018.
Clifton Collins, an Irishman convicted of drug trafficking, claims that the private keys to 6,000 BTC worth $56 million were irretrievably lost. Collins claims that he split the amount up between several wallets, the private keys to which he concealed inside a fishing rod that had been either stolen or thrown away during confiscation. Whether or not his story is true, it seems the court is unable to access the coins.
1,500 BTC and 6,000 BCH were hacked from the founder of Dreamhost, Josh Jones. Jones originally posted the story of the hack on Reddit, in which he claimed to be the victim of a SIM swap hack, however his post was subsequently deleted. It’s disturbing that such an amount was stored in insecure wallets vulnerable to a known angle of attack.
Before we conclude, this week’s “Bitcoin quick question” is what is the Bitcoin halving event?
The Bitcoin halving event happens roughly every four years cutting the rewards given to Bitcoin miners in half.
The bitcoin mining reward initially started out at 50 Bitcoins with each mined block back in 2009. Every 210,000 blocks this reward is cut in half. The first halving happened in 2012, the second in 2016 and in May of this year the third halving will take place, reducing the mining reward to only 6.25 Bitcoins per each mined block. The halving was designed by Satoshi Nakamoto to keep Bitcoin’s inflation in check and since the halving basically cuts the supply of new Bitcoins in half, many believe this event will have a dramatic effect on Bitcoin’s price.
If you want to learn more about the upcoming halving event check out the link in the description.
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